New Delhi, July 10 -- The Reserve Bank of India (RBI) is likely to keep policy rates unchanged in the near term, but BofA Securities expects a cumulative 50 basis points (bps) rate hike from December 2026 as inflation risks become increasingly driven by domestic factors.

According to the report, macroeconomic risks have shifted from geopolitical tensions to local weather conditions, which are expected to play a key role in shaping future monetary policy.

The firm has raised its FY27 GDP growth forecast to 6.9 per cent from 6.5 per cent, citing stronger consumption and investment demand.

The report projected FY27 consumer price index (CPI) inflation at 4.8 per cent, lower than earlier estimates. However, it warned that below-normal mons...